Airtel’s Smartcash PSB rolls out across selected cities in Nigeria

BY CHARLES ABUEDE

Leading telecoms operator, Airtel Nigeria, is rolling out its payment service banking operation in Nigeria after receiving its operating licence for a PSB business in Nigeria, the company said in a disclosure filed to the exchange and signed by Simon O’Hara, the company secretary.

Airtel Nigeria explained that its mobile money service will only be made available at this roll out phase at selected retail touchpoints, and that operations will be expanded gradually across the country over the next few months.

These points, however, will likely be major cities and towns where the business will thrive quickly, while efforts will continue to be made to expand across all 774 local government areas in Nigeria.

But already pencilled down for the rollout are Lagos, Abuja, Kano, Port Harcourt, Asaba, Ibadan, Maiduguri, Kaduna, Sokoto, Yenagoa, Owerri, and Awka, amongst others.

Background to the story

In April 2022, Airtel Africa’s subsidiary, SMARTCASH Payment Service Bank Limited, was granted final approval to operate a payment service bank (‘PSB’) business in Nigeria. The PSB licence is required for Airtel to be able to provide mobile financial services in Nigeria, including accepting cash deposits and carrying out payments and remittances, issuing debit and prepaid cards, operating electronic wallets and rendering other financial services.

What this would mean for the economy and the industry is that the delivery of mobile money services will help drive financial inclusion in the country as the low penetration of traditional banking across the country leaves a number of unbanked customers whose needs can now be largely fulfilled through mobile money services.
The wireless carrier said it aims to drive the uptake of Airtel Money services in all its markets, harnessing the ability of the profitable mobile money business model to enhance financial inclusion in some of the most ‘unbanked’ populations in the world.

What Airtel numbers are saying

It is interesting to note that Airtel’s distribution expansion and enhanced offerings helped drive 20.7 percent growth in its mobile money customer base, as it now serves over 26.2 million customers, representing 20.4 percent of its total customer base (31.1 percent excluding Nigeria).

Mobile money continues to be one of the telecom company’s fastest-growing services, delivering revenue growth of 34.9 percent in FY’22. It is an increasingly important part of Airtel’s business, delivering $64.4 billion of annual transaction value, and accounting for 11.7 percent of total revenue in FY’22.

However, mobile money ARPU improved by 12.2 percent in FY’22, driven by increased transaction values and higher contributions from merchant payments, cash transactions, P2P transfers and mobile services recharges through Airtel Money.

What the company is saying

In his comment on the milestone, Segun Ogunsanya, chief executive officer of Airtel Africa, said: “I am very excited to announce our commencement of operations for financial services in Nigeria through SmartCash PSB. This is the beginning of our journey to revolutionise the financial services landscape in the country.

“To help further digitise the economy, and most importantly to help bank the unbanked by reaching the millions of Nigerians who do not currently have access to financial services by delivering current and savings accounts, payment and remittance services, debit and prepayment cards and more sophisticated services,” Ogunsanya said.